Eq: Large Cap

(New York)

Rising rates are upon us. The economy is red hot and a Fed rate hike is imminent, with another likely coming in December. This puts many sectors and stocks at risk. So what are the best sectors and ETFs to invest in right now? Three sectors that stand to benefit are financials, technology, and consumer discretionary, so buying stocks and ETFs there appears a good bet. For technology, Invesco has a momentum focused fund for tech leaders called the DWA Technology Momentum ETF (PTF) which seems interesting. In consumer discretionary, the SPDR Consumer Discretionary Select Sector Fund (XLY) gives good coverage.

FINSUM: All of these bets are cyclical (meaning the sectors benefit because the economy is strengthening when rates rise, which boost consumer spending). Banks are a little bit more compelling to us though, as they benefit from an improved economy, but they also directly gain from rising rates through a better net interest margin.

(New York)

REITs are a tough area to invest in right now. On the one hand they look vulnerable because of the rising rate environment, but they have also surged recently at the same time as offering enticing dividends for investors. The answer, then, may be to find undervalued REITs, and Barron’s has put out an article helping to do just that. Here are some REITs the publication highlights: Invitation Homes, Front Yard Residential, Digital Realty Trust, InterXion Holding, LaSalle Hotel Properties, and Extended Stay America.

FINSUM: REITs tend to have very good dividends, but tend to suffer during periods of rising rates because of this. They seem like a good source of income right now, but need to be chosen very carefully.

(New York)

Sometimes balancing good dividends with strong growth is hard. The best dividends tend to come from mature and stable companies, but they often don’t have the best growth prospects. This is usually fine, but it does make them vulnerable in rising rate periods. According, here are ten stocks with strong dividends and good growth potential: SAP, Motorola, NetApp, Logitech, Garmin, Verizon, AT&T, Vodafone, Centurylink, and Consolidated Communications.

FINSUM: This list is very tech and telecoms heavy, but that seems a good balance if you are looing for both growth and strong dividends.

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